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Pradhan fights Gadkari over Mumbai Port FSRU

Vol 20, PW 6 (01 Dec 16) People & Policy

If you didn't know before, you do now: a plan by the Mumbai Port Trust to set up a 5m t/y LNG FSRU is hostage to an imminent showdown between shipping minister Nitin Gadkari and oil minister Dharmendra Pradhan.

This report learns cabinet clearance is pending only because of vocal opposition by Pradhan. It's believed the oil minister wrote to the PMO in September arguing that the proposed Mumbai FSRU makes no commercial sense with the Dabhol LNG terminal so close.

Pradhan adds Dabhol is well positioned to supply any local gas demand. But his complaints have upset heavyweight BJP leader and shipping minister Gadkari.

Private investors are willing to put in their money. They're all aware of Dabhol's existence and the commercial risks it poses to any new LNG project." Shipping secretary Rajive Kumar wrote to the PMO two weeks ago supporting the FSRU project as a means for the Mumbai Port Trust to harvest revenue without investing any money.

"We expect results soon," he adds. "Gadkari is pushing this project (with the PMO)." In an apparent show of support, bidders Shapoorji Pallonji and a consortium of IMC Infrastructure with Norway's Hoegh LNG have agreed to extend till January 2 the validity of bids and bank guarantees submitted on May 5.

Mumbai Port Trust is still waiting for environment ministry clearance for its FSRU, even though the obligatory public hearing by the Maharashtra Pollution Control Board took place on July 22. Even the minutes of the hearing have not been sent to the Mumbai Port Trust by the Pollution Control Board. Some say this kind of delay is typical of government agencies dealing with state-promoted projects where there are no lucrative personal incentives for officials - a stark contrast to private sector projects. "Between a private or a government project, the private project always gets cleared first and much faster," says a government source. "When we do receive the public hearing minutes we can apply for environment ministry clearance. This will usually take around two months." Expected to cost Rs2600cr ($379m) on a Design, Build, Finance, Operate, and Transfer model, the Mumbai Port Trust estimates revenue at around Rs100cr/year ($15m).

Mumbai Port Trust is still waiting for environment ministry clearance for its FSRU, even though the obligatory public hearing by the Maharashtra Pollution Control Board took place on July 22. Even the minutes of the hearing have not been sent to the Mumbai Port Trust by the Pollution Control Board. Some say this kind of delay is typical of government agencies dealing with state-promoted projects where there are no lucrative personal incentives for officials - a stark contrast to private sector projects. "Between a private or a government project, the private project always gets cleared first and much faster," says a government source. "When we do receive the public hearing minutes we can apply for environment ministry clearance. This will usually take around two months." Expected to cost Rs2600cr ($379m) on a Design, Build, Finance, Operate, and Transfer model, the Mumbai Port Trust estimates revenue at around Rs100cr/year ($15m).